Development Slowing in Dubai, UAE

The global credit crisis is beginning to affect the future of developments in Dubai, UAE. The first Formula One theme park was scheduled to open later this year in Dubai Motor City. However, investors just announced a delay in completion of the park. They now hope to open in 2010, unless new financing can be found in the next few weeks.

Over the last decade Dubai has exploded into the premiere leisure and business destination in the Middle East. Manmade islands, luxury resorts, and world-class sporting venues have attracted millions of tourists to this desert paradise by on the Persian Gulf. With the Dubai International Boat Show about to begin, the question becomes is the wealth and luxury of the yachts it features sign of the future of the city or is the stalled development a better indicator?

The Formula One park is the first of its kind in the world. The $460 million project is fifty percent complete. The next step in construction, the installation of the rides, has been halted due to banks pulling out of the development. While the project director remains confident that the park will open, he is highly doubtful the funding can be found soon enough to ensure a 2009 opening.

This is only the latest suspension of major developments in Dubai. Experts estimate that as much as a quarter of the over 800 projects currently being developed in Dubai have been suspended due to credit and debt concerns. This includes the halt of construction on the world’s tallest skyscraper as well as the the building of additional artificial islands off the coast.

With much of Dubai’s economy tied up in tourism, trade, and real estate, its no wonder that the current global economic problems are having a sharp affect on the city’s development. With tourism falling off worldwide, the hotels in Dubai, UAE are facing the same slowdown as other global tourist destinations. Likewise the restaurants, entertainment venues, and retail stores will have to adjust to the loss of future growth. Given the business boom the region has experienced, Dubai could be in for quite a shock.

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Published by Ryan on March 1st, 2009 tagged Business, Travel

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